A System for Accomplishing Your Long-Term Investment Goals

Many investors, especially those newly in charge of wealth or those who need to invest well for retirement, are feeling like one of Buffett’s bathers caught without a suit at low tide. The world has changed dramatically in recent decades, but the way most prepare for retirement, protect their personal wealth, and invest their retirement nest egg has not.

Redefining the G-3 Welcome to the Chinese Renminbi

Rebecca Patterson, Chief Markets Strategist for J.P. Morgan Asset Management, Institutional discusses her belief that structural changes in the global economy and markets are redefining the G-3 — and warrant replacing the yen with the Chinese renminbi. She explores key issues regarding the G-3 currencies and why China merits a place among them.

Alternative Approaches to Fixed Income Indexing

With the 2008–2009 global financial crisis still a fresh memory and sovereign-debt woes playing out almost daily in Europe, fixed income investors are seeking alternatives to traditional market-cap-weighted indexing. The authors of a new Vanguard research paper examine several alternative index-weighting methodologies commonly proposed in the global sovereign and U.S. corporate marketplaces. They show that such methods are not a better way to measure market performance, but merely a reweighting of risk within that market.

PIMCO Cyclical Outlook

This paper by Saumil H. Parikh of PIMCO discusses the impact in 2012 of further Eurozone deleveraging. It is his view that Eurozone deleveraging will slow the global economy over the next 6 to 12 months. In turn this will cause U.S. growth to slow to between 0% and 1%. This is an extremely pessimistic assessment and our view at BAM is these types of predictions should be viewed skeptically. Analysts rarely seem to get it right which is why we stick to a buy-and-hold strategy that has worked well for us over time.

Morningstar’s Attempt to Predict Performance

This paper by Robert Huebscher warns investors to be skeptical of Morningstar’s star rankings. He points out how difficult it is to predict which managers will out preform others advocates passive rather than active management.